05-13-2020 Council Packet - Laserfiche WebLink

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*Preliminary, subject to change.2 certain proceeds of insurance and condemnation awards. Pursuant to the Mortgage, the Borrower has granted to the Trustee a mortgage lien, subject to Permitted Encumbrances, on and an assignment of rents and leases with respect to all of the Borrower’s interests in the 2020 Project and a security interest to the Trustee in all of the Borrower’s furniture, fixtures and equipment related to the 2020 Project. The Limited Guaranty. The Series 2020 Bonds are also secured by amounts payable from Presbyterian Homes and Services, a Minnesota nonprofit corporation and an organization described in Section 501(c)(3) of the Code and is a Tax-Exempt Organization (the “Limited Guarantor”). The Limited Guarantor will guaranty payment of debt service on the Series 2020 Bonds pursuant to the terms of the Limited Guaranty Agreement, dated as of ________ 1, 2020 (the “Limited Guaranty”), from the Limited Guarantor to the Trustee. Under the terms of the Limited Guaranty, the Limited Guarantor agrees to provide a guaranty for the payment of debt service on the Series 2020 Bonds, subject to a limit of $4,000,000 (plus any costs of collection). The Limited Guaranty is subject to release and termination as set forth in the Limited Guaranty. Payments by Limited Guarantor under the Limited Guaranty are pledged solely to the Series 2020 Bonds. See “SECURITY FOR THE SERIES 2020 BONDS – The Limited Guaranty” and “APPENDIX D - DEFINITIONS AND SUMMARY OF CERTAIN PRINCIPAL DOCUMENTS - THE LIMITED GUARANTY” in this Official Statement. Reserve Fund. On the date of issuance of the Series 2020 Bonds, an initial deposit will be made to the Reserve Fund in the amount of $_____* (the initial “Reserve Requirement”). Upon issuance of the Series 2020 Bonds, the Reserve Requirement will be equal to the maximum annual debt service on the Series 2020 Bonds (excluding the final year of maturity) and such amount may be increased upon the issuance of Additional Bonds in accordance with the terms of the Indenture. Amounts in the Reserve Fund may be used by the Trustee to pay principal and premium of and interest on the Series 2020 Bonds if the amounts in the Series 2020 Account of the Bond Fund are insufficient for such purpose. See “SECURITY FOR THE SERIES 2020 BONDS - Reserve Fund” in this Official Statement. Management Agreement. The Project will be managed by PHS Management, LLC (the “Manager”) is a Minnesota limited liability company whose sole member is Presbyterian Homes Housing and Assisted Living, Inc., a Minnesota nonprofit corporation and an organization described in Section 501(c)(3) of the Code as a Tax-Exempt Organization (“PHHAL”). Both the Manager and PHHAL are subsidiaries of the Limited Guarantor. The Manager will manage the Project pursuant to an Amended and Restated Management Services Agreement, dated as of ________ 1, 2020 (the “Management Agreement”), between the Borrower and Manager. See “APPENDIX A - THE BORROWER, LANGTON SHORES AND THE LIMITED GUARANTOR” in this Official Statement. No Subordination of Management Fees. The Borrower has contracted with the Manager under the terms of the Management Agreement to receive certain administrative and oversight services necessary for the operation of the Project. The Manager currently manages the 2018 Project and will manage the Project upon completion for the Borrower and the Manager will continue to manage the Project for the Borrower during the term of the Series 2020 Bonds. Any Management Fees payable by the Borrower to the Manager with respect to the Project will not be subordinated in right of payment of debt service on the Series 2020 Bonds. See “APPENDIX D - DEFINITIONS AND SUMMARY OF CERTAIN PRINCIPAL DOCUMENTS – THE LOAN AGREEMENT – No Subordination of Management Fees” in this Official Statement. THE SERIES 2020 BONDS ARE NOT GENERAL OR MORAL OBLIGATIONS OF THE ISSUER, THE HOST CITY, OR THE STATE OF MINNESOTA (THE “STATE”), NOR IS THE TAXING POWER OF THE ISSUER, THE HOST CITY, OR THE STATE, PLEDGED TO THE PAYMENT OF THE PRINCIPAL AMOUNT THEREOF OR THE INTEREST OR PREMIUM, IF ANY, THEREON. THE SERIES 2020 BONDS SHALL CONSTITUTE SPECIAL, LIMITED